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The US gained only 20K jobs in February, far worse than expected, but coming after several upbeat months. What’s next?

Here is their view, courtesy of eFXdata:

CIBC Research discusses its reaction to today’s US jobs report for the month of February.

“Coming off the back of such a strong January print, there was always the risk of a disappointing February job gain. However, the mere 20K increase in total non-farm payrolls was even weaker than we had anticipated and puts a question mark over just how resilient the labor market is and how supportive household income growth will be in driving a pick-up in consumer spending.

That said, some of the details were more encouraging, with the unemployment rate dipping to 3.8% again, from 4.0% in January, and wages rising by an above-consensus 0.4% on the month and 3.4% year-over-year. The dip in the unemployment rate came even with an unchanged participation rate, while the underemployment rate fell markedly to 7.3%, from 8.1%,” CIBC notes.

“The US dollar will likely trade lower and short-term yields could fall on the back of the large jobs surprise. However, given the recent volatility in the data the Fed will likely discount this as a one-off and only begin to worry if we see some weaker results in the months ahead,” CIBC adds.